Innovation does not scale

Even though life expectancies are increasing and drug sales are still rising, the future looks tough for the pharmaceutical industry.

An industry expert has suggested that the 'fail faster' approach taken by drug designers to avoid expensive late stage failures is harming the industry, allowing drugs with higher solubility and kinetic profiles but lower efficacies into the pipeline.

This stark warning about the direction the pharmaceutical industry is heading in was delivered at the Drug Discovery and Technology summit in London last week by Dr Simon Campbell, the former president of the Royal Society of Chemistry and ex-senior vice president of worldwide discovery at Pfizer.

The diminishing size of drug pipelines and expiring patents continue to cause concern said Campbell, but the ever-increasing expansion of big pharma through mergers and acquisitions is no solution.

"Consolidation will probably continue for the same bad reasons as before… (but) mega pharma is starting to realise that innovation doesn't scale," he said.

The recent job cuts at AstraZeneca and Pfizer were "an inevitable sign of unsustainable economics" and he called for the industry to break down R&D groups into manageable chunks, stating he preferred the Roman Centurion model of teams of 100 reporting to one boss rather than having hundreds of researchers working on the same project.

He also stated that the industrialisation of drug discovery does not work saying "it's a personal experience, not a mechanical process, and that needs to be appreciated."

Indeed, Pfizer has started to reorganise their research into smaller more focussed groups with others such as Bayer, Roche
and AstraZeneca following suit.

GlaxoSmithKline started to divide their R&D into therapeutic area six years ago, and now have seven Centres of Excellence for Drug Discovery (CEDDs).

With annual sales of drugs expected to soar to an all time high of $600bn in 2008 compared with $300bn in 1996, one might question where the problems for the industry stem from. However, $50bn of sales will be lost by the end of 2008 due to patent expiries as generic versions become available.

Campbell believes that problems have arisen from the technology hype surrounding new technologies such as genomics and proteomics, metabolomics, robotics, combichem, high throughput screening (HTS) and bioinformatics which have caused a data deluge for researchers to work through.

While the human genome project originally predicted 25,000 gene targets only 2 per cent of these have actually become drug targets, with 50 per cent of drugs on the market hitting only four gene families. He also said that only 6 per cent of targets have been previously undrugged and that only 5 drugs per year are the first against a new target.

He cited the fact that while more compounds were going in to Phase I and II clinical trials there was no evidence that the number of compounds entering Phase III is increasing - in fact there seemed to be a bottleneck in Phase II where more and more drugs were seeming to fail.

The efficacy of new drugs was claimed to be dropping with only 20% of NME approvals thought to be "improvements". This is occurring at the same time when the cost of bringing a drug to market is estimated to cost at least $1bn and is escalating,

He believes that "all new compounds can make it to Phase II trials," where issues such as solubility and kinetics (but not efficacy) can be easily fixed and called for companies to stop abandoning new compounds in the early stages of development to avoid the expense of a potential late-stage failure.

The validity of metrics-based evaluation was also questioned, as it does not matter how many drug candidates you screen for efficacy, but how many make it along the pipeline.

Of the external problems the industry was facing he highlighted the fact that Americans spend over $250bn a year on prescription drugs, but that was likely to change now the Democrat party has issued a statement saying they "will take action within the first 100 hours of the new Congress to give the Health Secretary authority to negotiate Medicare drug prices."

He also said that R&D is firmly rooted in Europe and the US, which account for 95 per cent of spending. However, R&D investment is slowly drifting out of Europe to the US due to the legislation climate in the EU hampering research investment.

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